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Natural Gas Price– Weekly Recap 12-16 March

March 17, 2012

Natural gas spot price continued its descent during the past week as it did during most of recent weeks. On the other hand the natural gas future price (April delivery) slightly rose last week. Thus the gap between future and spot expanded and the Contango reached a high level of $0.3/mmbtu. As indicated below, the high natural gas storage levels reduce the chances of natural gas price making a comeback in the weeks to come. Not only that, at the current high levels and as the U.S is exiting the winter time, natural gas may continue to trade down with no end in sight. If not for the high oil prices, natural gas prices could have been at an even much lower price by now.

During last week the Henry Hub spot price fell by 8.14% while the future price (April delivery) by edged up by 0.43%. During March natural gas spot price decreased by 16.8% and the future price (April delivery) fell by 10.73%.

Here is a short recap for the changes in natural gas prices for the week ending on March 16th 2012:

Natural Gas Price March – Weekly Recap and Analysis

The Nymex Henry Hub Future Price (April delivery) slightly rose during last week by 0.43% and reached on Friday $2.33 /mmbtu; its average daily change was 0.1%, and its weekly average price was 1.25% below the previous week’s average price.

Natural gas price (Henry Hub spot) on the other hand continued its tumbling down by 8.14% during the week, and its average price was 6.74% below last week’s average price.

The spread between the natural gas future and spot prices, i.e. future price minus spot price (if the spot are higher than the future its called Backwardation, if future is higher than its called Contango) remained in Contango during the week, by the end of the week the gap expanded to $0.30/mmbtu, i.e. Contango.

Natural Gas Price Charts

The following charts shows the changes in natural gas (Henry Hub)and futures prices (NymexHenry Hub) in $/mmbtu between March 12th and March 16th.

The first chart presents the developments in natural gas prices (Henry Hub future and spot) during last week: the natural gas future price edged up while the spot price sharply declined during the week.

In the second chart are the dailypercent changes of natural gas prices(Henry Hub spot and Nymex Henry Hub future).

Natural Gas Storage Update – EIA Report:

According to the recent natural gas report, the underground natural gas storage declined last week by 64 Bcf to 2,369 billion cubic feet for all lower 48 states; the current natural gas storage is 51.7% above the 5-year average, and is also 45% above the storage level during the same week in 2011. The high storage levels reduce the chances of natural gas price making a comeback in the weeks to come. Not only that, at the current high levels and as the U.S is exiting the winter time, natural gas may continue to trade down with no end in sight. If not for the high oil prices, natural gas prices could have been at an even much lower price by now.